ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Flexibility, Employment and Labour Market Reforms in India

There is intense debate on labour market reforms in India today. It is argued that but for restrictive labour laws that create inflexibility in the labour market, the Indian economy would have experienced a higher growth of employment. On the other hand, this view is vehemently contested by trade unions and many other economists. This paper shows that the Indian labour market is quite flexible despite so-called restrictive labour laws. However, at the same time, Indian labour laws are so numerous, complex and even ambiguous that they promote litigation rather than the resolution of problems related to industrial relations. A comprehensive view on labour market reforms is required, one that addresses the needs of both employers and workers. The author recommends simplifying and rationalising the complex and ambiguous extant pieces of labour legislation into a simple code that allows for labour adjustment with adequate social and income security for the workers.

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